sharepoint establishing the business case - sp sat kc oct 1 2016

The Business Case for SharePoint

SharePoint Saturday Kansas City

10/1/16

Agenda

1. Introduction

2. What this session is not

3. What this session is

4. Understanding Business Value

5. Purpose of a Business Case

6. Business Case components

7. SharePoint Value

8. Value in the Cloud

9. Exercise

About Me

• Varied background and career

• 12 years US Naval Service (Chief Petty Officer)

• BS Allied Health

• MA Counseling

• 7 years Probation / corrections

• Started working in technology in the Navy and through my corrections career

• 12 Years CIO experience in mid market / mid size company

• Broad and deep technical background

• Multiple IT and technology certifications across multiple technology areas and stacks

• Much more BS

• 10 years as a Business Solutions consultant

3

What this session is NOT

• How to

• Deep technical dive

• Technical demo

• SharePoint technical capabilities

• What’s New etc.

• Sales pitch

4

What this session IS

• Business focused

• Business problem focused

• Business driver focused

• Business pain and requirement focused

• Objective is to help IT / technology team members effectively bridge the gap between business and technology!

5

Questions

• How many of you are IT team, staff or leadership?

Questions


• How many of you are business?

Questions



• How many are more of a hybrid?

Questions




• How many of you are Business analysts?

Questions





• How many of you are Project managers?

Questions






• How many of you are developers?

Questions






• How many of you are developers?

• How many of you are architects?

Questions

• Who has worked to budget for a SharePoint implementation?

Questions


• How many of your organizations have a specific business case model that you use? (Six Sigma – Kaizen; Rational Unified Process Requirements, Envisioning Sessions etc).

Questions



• How do you go about gathering, documenting and understanding your business, technical and functional requirements?

Questions




• For what business solution are you using SharePoint?

Questions




• For what business solution are you using SharePoint?

• Who has done the business case for migrating to the cloud?

Establishing Business Value

Establishing Business Value - Terms

• Business Drivers

• Business Problem

• Business Case

• Business Value

• Business Benefits

The business doesn’t care about SharePoint. They care about the capabilities SharePoint is providing.

How are you using SharePoint?

• Intranet• Collaboration

• Communication

• Content Management

• Search

• BI/Performance Management

• Forms/Workflow

• Public Facing Websites

• Extranet

Business Drivers

• Whether managers plan to implement new-business processes or specify new technology, a proposed change in operations often involves a financial investment, forcing managers to make an effective business case that justifies the change. To make the case, managers must understand business drivers the change must support.

• Simply put, it is critical to show the way the proposed change will better align the organization with its mission. It must show the way this proposed project’s measurable benefits will outweigh potential risks. Managers should consider the primary business drivers. One major global facilities organization identified its top five business drivers as:

Business Drivers

• elevate the level of consistency and quality of services across the entire portfolio and automate standardized business processes by using enabling technology

• shift time spent on labor-intensive activities to higher value-add activities

• achieve data transparency to allow visibility and timely access to data at all levels of the organization

• leverage technology as a resource to scale for increasing client demands, while reducing the cost of providing those services

• support professional staff by freeing up their time for core activities, aid in career growth, and make the collective institutional knowledge available for the entire organization.

Business Problem

Well-defined problems lead to breakthrough solutions. When developing new products, processes, or even businesses, most companies aren’t sufficiently rigorous in defining the problems they’re attempting to solve and articulating why those issues are important. Without that rigor, organizations miss opportunities, waste resources, and end up pursuing innovation initiatives that aren’t aligned with their strategies. How many times have you seen a project go down one path only to realize in hindsight that it should have gone down another? How many times have you seen an innovation program deliver a seemingly breakthrough result only to find that it can’t be implemented or it addresses the wrong problem? Many organizations need to become better at asking the right questions so that they tackle the right problems.

Harvard Business Review

Business Problems or The Business Pain

• Collaboration


• Collaboration

• Communication


• Collaboration

• Communication

• Files (storage, single source of truth, over writing work, location, records management)


• Collaboration

• Communication


• Search


• Collaboration

• Communication


• Search

• Enterprise Reporting / BI

Human Resources Issues

• Competition for talent

• New technology developments

• Rising sense of insecurity

• Economy

• Demographic changes

• Data driven HR practices

How SharePoint Helps with HR Issues

One tool that can he used to help you, is SharePoint. Some of the TOP TEN ways that SharePoint can assist with Human Resources initiatives are:

• Policies and Procedures

• Leave Requests

• Resume Databases

• Requisition Requests

• Offer Letter generation

• Employee reviews

• On boarding

• Off boarding

• Mentoring programs

• Training

Corporate Communications

• If you want to create business value from your communications in today’s environment you need to master both the art and the science behind corporate communication. As corporate communications moves from “nice to have” to “business critical” the expectations and demands have grown tremendously. (Forbes).

• As you know, communication problems in the workplace can cost your company productivity and money. Without efficient communication, your company is unable to exchange information essential to daily operations and create a communication network to carry new product data. Understanding examples of workplace communication issues can help you to create policies that will address problems and create an efficient communication network in the office.

Corporate Communications

Some of the TOP TEN ways that SharePoint can assist with Corporate Communication initiatives are:

• Cross platform compatibility

• Usability

• Web content management

• SEARCH

• MS Office integration

• Social Computing

• Reporting

• File storage, synchronization and sharing

• Mobile device compatibility

• Applications and Line of Business integration

SharePoint Business Scenarios

• Point Solutions• HR

• Project Portals

• Product Development Portals

• Sales Support Portals

• Customer Service Portals

• BPM/Workflow solutions

Business Benefits

A business benefit can be defined as an outcome of an action or decision that contributes towards meeting one or more business objectives.

Business Benefits

• Why was it good

• What did they get

• Why would they do it again

• Service to customers

• Value to customers

• Lower cost

• Revenue growth

What is a Business Case

• A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation.

• The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need

http://en.wikipedia.org/wiki/Project

http://en.wikipedia.org/wiki/Presentation

http://en.wikipedia.org/wiki/Logic

http://en.wikipedia.org/wiki/Resources

Why Use a Business Case

You’ve got a great idea for a new product that will increase revenue or a new system that will cut the company’s costs. But how can you be sure that it’s a worthwhile investment? Any time you propose a capital expenditure, you can be sure senior leaders will want to know what the return on investment (ROI) is. There are a variety of methods you can use to calculate ROI — net present value, payback, breakeven — and internal rate of return, or IRR.

Why use a Business Case?

• SharePoint like every business technology is an investment

• Before making an investment you should always know your expected return

• Business Case Formulas:

• Net Present Value (NPV)

• Return on Investment (ROI)

• Rate of Return (ROR)

• Internal Rate of Return (IRR)

• Cost Benefit Analysis

Why use a Business Case?

• Focus requirements/scope on capabilities that will deliver Value

• Useful for managing scope change

• Beginning of the Organization Change Management Process – Ensure Users will use the system

• Level of Precision • Depends on Maturity of the Plan

• Organization Culture – what is your culture?

• Make and document assumptions

Business Case Components

• Basic Components • Costs,

• Benefits,

• Risk,

• Time

• People tend to focus on Costs

It Starts at Measurable Pain

• Key Performance Indicators (KPIs) are measurable pains

• Pains have no quantitative value if they cannot be measured

Missed Deadlines

Overflowing Pipeline

Insufficient Staff

Competition

Budget Constraints

Revenue

Employee Utilization

Customer Retention

Number of Customers

Poor Cash Flow

KPIsCommon Reasons For Pain

Business Process Value Modeling

• Study one process at a time – Survey to understand best opportunities

• Prerequisite: Work directly with the end user

• Physically map business process metrics to get buy-in for process change

• Business managers are the source for pains and benefit equation variables

• Pain/KPI discussion drives business value versus productivity

• Keep equations simple

• Estimate process change metrics and then present them for approval if you can’t get the numbers you need• Get buy-in to defend numbers before presenting

Cost Analysis: Best Practices• Group costs into buckets

• For example, desktop and server solutions usually have different cost buckets

• The key to effective costing is identifying the time spent on each activity - Work Breakdown Structure

• Recognize costs that should not be included in analysis

• Costs that would be incurred anyway

• e.g.., normal hardware refresh

• Costs not directly related to the project

• e.g., additional system changes

• Costs already incurred (sunk costs)

• e.g., operating system upgrades already completed

• Be sure to include all components

• Always perform “what-if” analysis

• Like benefits, get buy-in to defend numbers before presenting business value study

Cloud?

Moving to the Cloud

• How many of you have moved to the cloud?

• Why would you move to SharePoint online?

• Why wouldn’t you move to SharePoint online?

SharePoint Online IT Cost comparison

TOT Jan Apr Jul Oct Jan Apr Jul Oct

On Premises 6,255,536$ 249,786$ 362,096$ 275,746$ 252,196$ 251,418$ 244,346$ 244,346$ 244,346$

Server Purchase /5 yr 7,000$ 17 17 17 17 17 17 17 17

Server Maintenance /yr 840$ 17 17 17 17 17 17 17 17

Server License /3 yr 6,600$ 17 17 17 17 17 17 17 17

Support Engineer /yr 130,000$ 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6

Storage /TB 3,200$ 1.7 2.2

CAL /yr 35.64$ 8527 8527 8527 8527 8527 8527 8527 8527

SP2016 Upgrade 157,000$ 75% 20% 5%

SharePoint - On Premises2016 2017


Hosted 4,971,817$ 108,898$ 243,898$ 216,398$ 208,898$ 208,141$ 243,898$ 216,398$ 208,898$ Total 6,817,093$

Hosted

Subscription /mo 1.29$ 8527 8527 8527 8527 8527 8527 8527 8527

ECAL /yr 35.64$ 8527 8527 8527 8527 8527 8527 8527 8527

Online Migration 50,000$ 75% 20% 5%

Support Engineer /yr 130,000$ 3 3 3 3 3 3 3

Add'l Storage /GB 2.05$ 850

SharePoint - Online2016 2017

Key Metrics by Stakeholder

Metrics Desirable Results

TCO LowerCIO

Stakeholders

Any Customer KPIs Company SpecificBDM

Payback Period

IRR - Internal Rate of Return

NPV - Net Present Value

Ideally < 12 months

$ > Zero

% > Company Hurdle Rate

CFO

Beware unreasonable results:• IRR, ROI >500%• Instant Payback

Beware undesirable results:• IRR < hurdle rate• ROI < 0%• Payback > 24 months

SharePoint Online IT Cost comparison


On Premises 6,255,536$ 249,786$ 362,096$ 275,746$ 252,196$ 251,418$ 244,346$ 244,346$ 244,346$

Server Purchase /5 yr 7,000$ 17 17 17 17 17 17 17 17

Server Maintenance /yr 840$ 17 17 17 17 17 17 17 17

Server License /3 yr 6,600$ 17 17 17 17 17 17 17 17

Support Engineer /yr 130,000$ 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6

Storage /TB 3,200$ 1.7 2.2

CAL /yr 35.64$ 8527 8527 8527 8527 8527 8527 8527 8527

SP2016 Upgrade 157,000$ 75% 20% 5%

SharePoint - On Premises2016 2017


Hosted 4,971,817$ 108,898$ 243,898$ 216,398$ 208,898$ 208,141$ 243,898$ 216,398$ 208,898$ Total 6,817,093$

Hosted

Subscription /mo 1.29$ 8527 8527 8527 8527 8527 8527 8527 8527

ECAL /yr 35.64$ 8527 8527 8527 8527 8527 8527 8527 8527

Online Migration 50,000$ 75% 20% 5%

Support Engineer /yr 130,000$ 3 3 3 3 3 3 3

Add'l Storage /GB 2.05$ 850

SharePoint - Online2016 2017

Group Business Case

• Manufacturing Company with 1,000 desktop employees, 1,000 desk less employees working across 8 locations and 300 agent sellers

• Running SharePoint 2007 environment with 4 servers(prod), 4 servers(test), 2 servers(dev), 4 servers(DR)

Group Business Case

• Manufacturing Company with 1,000 desktop employees, 1,000 desk less employees and 300 agent sellers


• Should they upgrade?

Group Business Case



• They have two other old legacy document management systems

Group Business Case




• They spend $200,000 with Fedex each year sending documents to their sellers

Group Business Case




• They spend $200,000 with Fedex each year sending documents to their sellers and they still struggle to keep them up to date

• Every year during open enrollment, they have to bring on addition temps to handle all of the enrollment changes

Questions?

Bridging the gap between business and technology

Contact Me

[email protected]

618-972-2152

https://www.linkedin.com/in/matthew-bowers-ab8a932

https://www.facebook.com/matthew.w.bowers.1

@mbowersmailctp